UK fuel duty rise scrapped by Keir Starmer to help motorists

Prime Minister Sir Keir Starmer announced that the 5p per litre fuel duty cut introduced in March 2022 will remain in place until the end of the year.

It was originally due to increase by 1p per litre on September 1, followed by two 2p rises on December 1 and March 1.

Sir Keir Starmer said: “Families across the United Kingdom are facing impacts of a war that we did not choose.

“This is not our war, but while the parties opposite wanted to jump into it, Labour will always protect working people.”

Trade in the Strait of Hormuz, disrupted by Iran’s restrictions on tanker movements, has driven up UK fuel costs by an average of 26p per litre for petrol and 44p for diesel since the conflict began on February 28.

Steve Gooding, director of motoring research charity the RAC Foundation, welcomed the extension.

Mr Gooding said: “Although today’s news on fuel duty won’t have the immediate effect of bringing forecourt prices down, at least it shows that ministers have registered the financial pain caused by rampant pump prices for individuals and for business.

“Since the start of the Iran conflict, drivers have already paid a war premium of a staggering £3 billion in inflated fuel prices, half-a-billion of which has gone to the Exchequer in VAT receipts.”

Sir Keir also confirmed that hauliers will receive a “12-month road tax holiday.”

The Treasury said this will reduce their annual renewal cost to £1, saving a typical heavy lorry operator £600 and those with the largest vehicles £912.

The RAC reported on Tuesday that the average price of petrol in the UK has risen to 158.5p per litre, the highest since December 2022.

It warned that further rises are likely, with pump prices expected to reach at least 160p in the coming weeks.

Additional relief has been promised to users of red diesel, including farmers and rail freight operators.

The Government will cut the duty from 10.18p to 6.48p per litre from June 15 until the end of the year.

Downing Street said the total package of measures will cost £455 million.

The Prime Minister’s official spokesman said: “Given the current impact of the conflict, it is right to extend the 5p cut to the end of this year.”

It remains unclear whether the 5p duty cut will continue beyond 2026.

Chancellor Rachel Reeves is expected to outline longer-term plans for fuel duty in the autumn Budget.

John Cassidy, Managing Director at Close Brothers Motor Finance, said: “The Government’s decision to postpone the fuel duty rise will provide some respite to motorists.

“Events in the Middle East means drivers have been feeling the pinch at the pumps at a time when the cost of motoring continues to soar, putting strain on household finances.

“With 42% of motorists stating that they have been worried about further petrol price rises, the announcement should go some way to alleviating financial stress.

“However, many will see this as papering over the cracks of much wider concerns, and will expect the Government to implement further measures to ensure drivers can afford the cost of driving – something that is essential to the daily lives of millions.”